05.15.17

Seychelles alters Tax Exemption for 13th month salary

Posted in Business and Economy, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 7:16 pm by Robert Klien

The Seychelles Government has recently published legislation in the Official Gazette to amend the jurisdiction’s individual tax regime.

Published in the Official Gazette on April 13, 2017, the Income and Non-Monetary Benefits Tax Act (Exemption) Order, 2017, sets the value of 13th month pay that an employee can receive tax-free at SCR10,000 (USD733).

Payments in excess of this amount will be subject to tax at 15%.

01.20.17

Seychelles provides Guide on Corporate Social Responsibility Tax

Posted in Business and Economy, Seychelles legislation at 10:23 am by Robert Klien

The Seychelles Revenue Commission (SRC) has issued a draft public ruling aimed at providing guidance on the definition of “turnover” for the calculation of liability to the Corporate Social Responsibility Tax (CSRT).

The 0.5% CSRT is imposed on businesses with an annual turnover equal to or exceeding the liability threshold of SCR 1 million(USD 75,100). Funds raised through the tax mostly fund community projects.

The CSRT turnover in the legislation is defined as “the gross receipts from carrying on of business.”

12.15.16

Seychelles to introduce significant Tax Changes in 2017

Posted in Business and Economy, Seychelles legislation at 10:43 am by Robert Klien

According to the newly released Budget, Seychelles will finalize significant reforms to its main taxes in 2017.

The jurisdiction will complete the introduction of a progressive personal income tax regime from July 1, 2017, rather than January 1, 2017. A SCR 8,555.5 (USD 660) tax-exempt threshold will be introduced, but it will not be available to expatriates. Income tax above that threshold will be subject to progressive rates of 15%, 20%, or 30%.

From July 1, 2017, a new property tax will be introduced on land ownership in Seychelles, to be levied only on foreigners, and purchases of private land by foreigners will also attract a high stamp duty. Further details of the new tax are still under consideration.

Also, it is proposed to change the Business Tax Act. The tax-free threshold for individual businesses, such as sole traders or partners, will remain at SCR 150,000. However to align personal income tax (PIT) and individual business tax rates, the tax rate on profits of between SCR150,000 to SCR1m will be increased from 15 to 20%. Profits above SCR 1 million will continue to be taxed at 33%.

The Government is also proposing that the presumptive tax rate will be realigned. The tax rate on businesses with a turnover of up to SCR 0.5 million is to remain at 1.5%, but a 3% tax will be imposed on businesses with a turnover from SCR 0.5 million. The new cap for the presumptive tax is proposed to rise to SCR 2 million, up from SCR 1 million. Professional taxpayers, such as accountants and engineers, will pay a 5% rate.

Larose also announced that, as from July 1, 2017, the Seychelles Civil Aviation Authority will impose an additional USD 10 passenger service fee. He noted that “the collection will be a direct contribution towards the country’s foreign exchange earnings to maintain the high standard of the Airport.”

12.13.16

Seychelles to introduce Significant Tax Changes in 2017

Posted in Business and Economy, Seychelles government, Seychelles legislation at 9:24 pm by Robert Klien

According to the jurisdiction’s newly released Budget, Seychelles will finalize significant reforms to its main taxes in 2017.

Seychelles will complete the introduction of a progressive personal income tax regime from July 1, 2017, rather than January 1, 2017. A SCR 8,555.5 (which is USD 660) tax-exempt threshold will be introduced, but it will not be available to expatriates. Income tax above that threshold will be subject to progressive rates of either 15%, 20%, or 30%.

From July 1, 2017, a new property tax will be introduced on land ownership in Seychelles, to be levied only on foreigners, and purchases of private land by foreigners will also attract a high stamp duty.

The Government of Seychelles is also planning to change the Business Tax Act. The tax-free threshold for individual businesses, such as sole traders or partners, will remain at SCR 150,000. However to align personal income tax (PIT) and individual business tax rates, the tax rate on profits of between SCR 150,000 to SCR1m will be increased from 15% to 20%. Profits above SCR1m will continue to be taxed at 33%.

In addition, it is proposed that the presumptive tax rate will be realigned. The tax rate on businesses with a turnover of up to SCR 0.5 million is to remain at 1.5%, but a 3% tax will be imposed on businesses with a turnover from SCR 0.5 million. The new cap for the presumptive tax is proposed to rise to SCR 2 million, up from SCR 1 million. Professional taxpayers, such as accountants and engineers, will pay a 5% rate.

Included in a substantial series of measures to help small and medium-sized enterprises (SMEs), the Government will exempt businesses with an annual gross revenue of up to SCR 1 m from paying tax in their first year of operation. Larose said that the medium- to long-term target is “to turn Seychelles into the SME capital of the Indian Ocean.”

Also, an additional cost for foreign visitors disembarking at the Seychelles International Airport was announced. As from July 1, 2017, the Seychelles Civil Aviation Authority will impose an additional USD 10 passenger service fee.

12.10.16

New tax measures announced in budget address

Posted in Business and Economy, Seychelles government, Seychelles legislation at 2:45 pm by Robert Klien

The Seychelles Minister for Finance, Trade and Economic Planning Peter Larose, delivering his budget address before the National Assembly on December 9.

A new tax on property owned by non-Seychellois citizens will be introduced in July 2017, said the Seychelles’ Minister of Finance in his presentation of the budget allocation 2017 to the members of the National Assembly.

Peter Larose is proposing a budget allocation amounting to around $584 million.

The new tax “will include foreigners with a Seychellois passport. Stamp Duty will be charged per square metre,” Larose said.

Also, he announced other new tax measures in his budget address including excise tax on fuel, excise tax on alcohol and tobacco products and progressive tax.

Larose said that for the excise tax on fuel, “An additional 50 cents per litre will be placed on fuel-based products. The Public Utilities Corporation (PUC), the Seychelles Public Transport Corporation (SPC) and Air Seychelles will not pay the additional cost.”

As regards excise tax on alcohol, an increase of 10% will be applicable on all drinks with an alcohol content of less than 16% in 2017. This will apply for both locally produced and imported alcoholic beverages.

In line with this revision, a 10% increase will also be placed on importation and production of tobacco products in 2017.

As for the Progressive Tax, the third and final stage will be implemented as of July 1, 2017, instead of January as was announced previously. This will be the Progressive Tax applicable on emoluments more than $648. A 15% rate will be applicable on earnings between $648 and $758 while a 20% tax will be applicable on earnings between $758 and $6,320. Workers with salaries above $6,320 will have to pay 30% on earnings above that threshold.

Larose also announced an additional cost for the services used by foreign visitors disembarking at the Seychelles International airport – as of July 2017, the Seychelles Civil Aviation Authority (SCAA) will put an additional $10 for services related to incoming foreign passengers.

04.05.16

Seychelles to limit Presidential Term

Posted in Seychelles government, Seychelles legislation at 2:20 pm by Robert Klien

On April 5, Seychelles parliament voted to amend the constitution and limit presidents to two 5-year terms in office, in contrast to wider Africa where many presidents have sought to extend term limits.
The jurisdiction’s nation elected James Michel as president in December 2015, giving him a 3rd term in office, but among the promises he made during his campaign was to ensure the change in the law.

The amendment required 2/3 thirds of the 32 lawmakers to vote in favour but all sitting members are from the ruling party except opposition leader David Pierre, who also supported the change. Pierre said that this amendment will give a chance to younger politicians to wait 10 years instead of 15, in order to contribute to the development of the Seychelles.

The new amendment will come into force at the next elections, when the incumbent president and vice president will not qualify to run for these positions.

03.01.16

Personal Income Tax Reform announced in Seychelles

Posted in Business and Economy, International Organisations, Seychelles government, Seychelles legislation at 2:10 pm by Robert Klien

The President of the Seychelles, James Alix Michel, has confirmed the changes that will be applied to the personal income tax system. These are designed to make taxation fairer and more equitable.

In his recent State of the Nation address, the President foreshadowed reforms aimed at reducing the tax burden on low-income earners and making the personal income tax system more progressive.

Under the changes, from July 2016, individuals earning up to SCR8,555.50 (USD 553.74) per month will not pay any income tax. Then, from January 2017, the first SCR8,555.50 in earnings will be subject to tax at 0%.

Also, Michel announced that the Ministry of Finance will undertake a review of the tax system in order to determine how the Government can “maximize its revenue” and reduce tax evasion in certain economic sectors.

The measures form part of the Government’s medium-term fiscal framework agreed with the International Monetary Fund (IMF), which is designed to stabilize the Government’s finances and reduce public debt. The medium-term fiscal strategy was first put in place in 2008 following a default in debt payments. The plan includes an IMF-agreed target to cut its debt-to-gross domestic product to below 50% by 2018.

According to the IMF, following the completion of its 3rd review of the Seychelles’ Extended Fund Facility (EFF), good progress is being made by the Government towards reducing the public debt burden, with the 2015 budget surplus expected to be around four percent of GDP.

Approximately USD 9.1 million has been received by the Seychelles in monetary assistance from the International Monetary Fund under the EFF arrangement approved in July 2014.

03.13.15

Seychelles Confirms Tax Amnesty

Posted in Business and Economy, Financial Services, Seychelles legislation, Seychelles offshore jurisdiction at 2:49 pm by Robert Klien

The availability of an amnesty on penalties and interest for businesses that have outstanding tax debts and returns has been confirmed by the Seychelles Revenue Commission (SRC).

Further to measures to boost tax compliance announced in the 2015 Budget, the Commission has implemented a debt recovery plan. This plan will apply to business tax arrears for tax years up to 2013 (for amounts payable in 2014), and for withholding tax, duties, and all other taxes, for payments due for tax years up to 2014.

To settle their outstanding tax as at December 31, 2014, or to submit outstanding returns, taxpayers have 3 options. The program offers:
a) a 100% waiver of penalties and interest on arrears cleared by May 31, 2015;
b) a 50% waiver of penalties and interest on arrears cleared by August 31, 2015;
c) a 25% waiver of penalties and interest on arrears cleared by October 31, 2015.

The Seychelles Revenue Commission is urging taxpayers to take advantage of the amnesty and settle their tax liabilities.

In order to complement the arrangements, there will also be a more aggressive stance on debt collection.

02.26.15

Multilateral Tax Cooperation Treaty signed by Seychelles

Posted in Double Taxation Agreements, International Organisations, International relations, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 7:28 pm by Robert Klien

On February 24, Seychelles became the 85th signatory of the Organisation for Economic Co-operation and Development’s (OECD’s) Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The Convention is a comprehensive multilateral instrument to tackle tax evasion and increase transparency. According to a statement made by the OECD, the signing therefore represents another important step in Seychelles’ efforts to improve its legal framework and practices as regards the exchange of information for tax purposes.

The Convention provides for all forms of administrative assistance, in tax matters, including the exchange of information on request and automatically; in tax examinations abroad and in plurilateral investigations; and in tax collection.

The OECD added that it has repeatedly called on all jurisdictions to sign the Convention and has asked the Global Forum on Transparency and Exchange of Information for Tax Purposes to report on progress made by its members in that respect.

11.01.14

Seychelles Seeks OECD Tax Transparency Endorsement

Posted in Business and Economy, International Organisations, Seychelles legislation, Seychelles offshore jurisdiction at 3:54 pm by Robert Klien

With a view to communicate measures aimed to enhance how the jurisdiction exchanges tax information with other territories in practice, Seychelles is preparing to submit a supplementary report to the Organisation for Economic Co-operation and Development (OECD) Global Forum.

In 2013, during Phase Two of the Peer Review Group rating process, the OECD rated Seychelles as non-compliant in certain areas, raising concerns regarding Seychelles’s tax transparency rules.

The Seychelles Minister of Finance, Trade and Investment, Pierre Laporte, met OECD representatives on the sidelines of the 7th Global Forum in Berlin from October 28-29 in order to update them on the new measures put in place to address the areas of non-compliance, and prepare for the submission of a supplementary report to the Peer Review Group for re-assessment.

At the same time, the Organisation for Economic Co-operation and Development has stated that Seychelles became one of the “early adopters” (by end-September 2017) of the Multilateral Competent Authority Agreement on the implementation of a new automatic exchange of information standard.

In accordance with the new standard, jurisdictions are obliged to obtain information from their financial institutions and automatically exchange it with other jurisdictions annually.

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